The IRS has issued an advance copy of TD 9911 on life insurance reserves under IRC 807(f)

Revenue Ruling 2020-19, which provides guidance on what constitutes a change in basis of computing life insurance reserves under § 807(f) of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act, and § 1.807-4 of the final regulations (TD 9911), which is being released contemporaneously with this revenue ruling.  This revenue ruling provides specific holdings in a number of different situations, with each holding indicating whether the described situation is a change in basis under § 807(f). 

WASHINGTON — As part of a larger effort to reach underserved communities, the Internal Revenue Service is taking a number of aggressive steps to expand information and assistance available to taxpayers in additional languages, including providing the Form 1040 in Spanish for the first time.

In addition to being available in English and Spanish, the 2020 Form 1040 will also give taxpayers the opportunity to indicate whether they wish to be contacted in a language other than English. This is a new feature available for the first time this coming filing season. 

Other changes include Publication 1, Your Rights as a Taxpayer, is now available in 20 languages. The 2020 version of Publication 17, Your Federal Income Tax, will be available early next year in seven languages – English, Spanish, Vietnamese, Russian, Korean and Chinese (Simplified and Traditional).

The agency’s newly expanded multilingual initiative is a key part of helping the IRS reach its goal of helping everyone, no matter where they live, what their background is, or what language they speak.

“Our diverse workforce is extremely proud to be able ease the inherent burden on taxpayers attempting to voluntarily comply with their tax responsibilities, including people who are more comfortable with other languages,” said IRS Commissioner Chuck Rettig. “We are continually increasing the information and services available in other languages as well as expanding our interpreter services so that we can interact in a more respectful manner with taxpayers in their most comfortable language. We expect to continue these important efforts as we work to earn the trust and respect of every American.”
 
As part of this expansion, many of the pages on the IRS.gov site are now available in seven languages and basic tax information is newly available in 20 languages on IRS.gov. It also means that taxpayers who interact with an IRS representative now have access to over the phone interpreter services in more than 350 languages. The IRS has also recently begun inserting information about translation services and other multilingual options into the high-volume notices that IRS sends out to taxpayers.

While the IRS has long provided some assistance in Spanish and some other languages, the agency is increasing the materials available in multiple languages and expanding outreach with multilingual community partners. Most recently, the IRS worked with partners in the tax and low-income communities and provided them with information and resources that they quickly translated and made available in an unprecedented 35 languages, promoting the Economic Impact Payments. The IRS plans to continue this effort on other agency priorities, including the 2021 filing season. The agency has also been increasing its multilingual outreach on Instagram, Twitter and other social media platforms during the past 18 months.

In coming months and years, the agency will continue to expand the availability of widely used IRS forms and popular publications in multiple languages. This includes increasing the number of highly visited IRS.gov web pages accessible in seven languages later this year.

For more information about tax help in other languages, visit IRS.gov.

Notice 2020-68 provides further information regarding certain provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019, and the Bipartisan American Miners Act of 2019.  

Revenue Procedure 2020-40 amends section 15.05 of Rev. Proc. 2016-37 and section 12.02 of Rev. Proc. 2019-39 to provide that a discretionary amendment made to a qualified pre-approved plan or 403(b) pre-approved plan is timely adopted if it is adopted by the deadline set forth in a statutory provision or guidance that is earlier or later than the general deadline applicable to discretionary amendments.  

Both items of guidance will be published in Internal Revenue Bulletin  2020-38 on Sept. 14, 2020

Revenue Procedure 2020-41 provides the domestic asset/liability percentages and domestic investment yields needed by foreign life insurance companies and foreign property and liability insurance companies to compute their minimum effectively connected net investment income under section 842(b) of the Internal Revenue Code for taxable years beginning after December 31, 2018.

Revenue Procedure 2020-41 will be in IRB:   2020-40, dated September 28, 2020.

WASHINGTON – Later this month, the Internal Revenue Service will start mailing letters to roughly 9 million Americans who typically don’t file federal income tax returns who may be eligible for, but have not registered to claim, an Economic Impact Payment. 

The letters will urge recipients to register at IRS.gov by Oct. 15 in order to receive their payment by the end of the year. Individuals can receive up to $1,200, and married couples can receive up to $2,400. People with qualifying children under age 17 at the end of 2019 can get up to an additional $500 for each qualifying child.

The letters are being sent to people who haven’t filed a return for either 2018 or 2019. Based on an internal analysis, these are people who don’t typically have a tax return filing requirement because they appear to have very low incomes, based on Forms W-2, 1099s and other third-party statements available to the IRS. But many in this group are still eligible to receive an Economic Impact Payment.

“The IRS has made an unprecedented outreach effort to make sure people are aware of their potential eligibility for an Economic Impact Payment this year,” said IRS Commissioner Chuck Rettig. “Millions who don’t normally file a tax return have already registered and received a payment. We are taking this extra step to help Americans who may not know they could be eligible for this payment or don’t know how to register for one. People who aren’t required to file a tax return can quickly register on IRS.gov and still get their money this year.”

The letter, officially known as IRS Notice 1444-A, is written in English and Spanish and includes information on eligibility criteria and how eligible recipients can claim an Economic Impact Payment on IRS.gov. The mailing, which will begin around Sept. 24, will be delivered from an IRS address. To help address fraud concern, a copy of the letter is available on IRS.gov.

If those receiving letters haven’t done so already, this letter urges eligible individuals to register by Oct. 15 for a payment by using the free Non-Filers: Enter Payment Info tool, available in English and Spanish and only on IRS.gov. More than 7 million people have used the Non-Filers tool so far to register for a payment. Those unable to access the Non-Filers tool may submit a simplified paper return following the procedures described in the Economic Impact Payment FAQs on IRS.gov.

The IRS reminds recipients that receiving a letter is not a guarantee of eligibility for an Economic Impact Payment. An individual is likely eligible if he or she is a U.S. citizen or resident alien; has a work-eligible Social Security number; and can’t be claimed as dependent on someone else’s federal income tax return. However, there can be a variety of situations that could affect an individual’s eligibility. For more information on eligibility requirements, recipients should read the Economic Impact Payment eligibility FAQs on IRS.gov.

The registration deadline for non-filers to claim an Economic Impact Payment through the Non-Filers tool is Oct. 15, 2020. People can also wait until next year and claim it as a credit on their 2020 federal income tax return by filing in 2021.

The IRS emphasizes that anyone required to file either a 2018 or 2019 tax return should file the tax return and not use the Non-Filers tool.

Don’t wait:  Non-Filers can still get a payment; must act by Oct. 15

Though most Americans − more than 160 million in all − have already received their Economic Impact Payments, the IRS reminds anyone with little or no income who is not required to file a tax return that they may be eligible to receive an Economic Impact Payment. This is true regardless of whether they get a letter.

“Time is running out this year for the IRS to issue payments,” Rettig said. “People who normally don’t file a tax return shouldn’t wait to see if they receive one of these letters. They can review the guidelines and register now if they’re eligible.”

Available in both English and Spanish, the Non-Filers tool is designed for people with incomes typically below $24,400 for married couples, and $12,200 for singles. This includes couples and individuals who are experiencing homelessness.

People can qualify for a payment, even if they don’t work or have no earned income. But low- and moderate-income workers and working families eligible to receive special tax benefits, such as the Earned Income Tax Credit or Child Tax Credit, cannot use this tool. They will need to file a regular return as soon as possible. The IRS will use their tax return information to determine and issue any EIP for which they are eligible.

Anyone using the Non-Filers tool can speed up the arrival of their payment by choosing to receive it by direct deposit. Those not choosing this option will get a check.

Beginning two weeks after they register, people can track the status of their payment using the Get My Payment tool, available only on IRS.gov.

Watch out for scams

The IRS urges everyone to be on the lookout for scams related to the Economic Impact Payments. In particular, watch out for scams using email, phone calls or texts related to these payments. Be careful and cautious: The IRS will not send unsolicited electronic communications asking people to open attachments, visit a website or share personal or financial information.

Remember, go directly and solely to IRS.gov for official information. In particular, both the Non-Filers tool and the Get My Payment tool are available exclusively on IRS.gov. They are not available on any other web site.

For more Information on the Economic Impact Payment, including updated answers to frequently asked questions and other resources, visit IRS.gov/coronavirus.

WASHINGTON – The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning Oct. 1, 2020. The rates will be:  

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during July 2020 to take effect Aug. 1, 2020, based on daily compounding.

Revenue Ruling 2020-18, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2020-39, dated Sept. 21, 2020.

Revenue Ruling 2020-18 provides the rates for interest determined under Section 6621 of the code for the calendar quarter beginning October 1, 2020, will be 3 percent for overpayments (2 percent in the case of a corporation), 3 percent for underpayments, and 5 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 0.5 percent.

Revenue Ruling 2020-18 will be published in Internal Revenue Bulletin 2020-39 on Sept. 21, 2020

WASHINGTON — The Internal Revenue Service announced today that Rachel Leiser Levy is the new Associate Chief Counsel, Employee Benefits, Exempt Organizations and Employment Taxes (EEE).

Levy has served as a principal at Groom Law Group in Washington, D.C., since 2015. She has an extensive background on issues including employee benefits, employment taxes and exempt organizations, including work at the Treasury Department and the Joint Committee on Taxation. She begins in her new role Sept. 29.

“Rachel brings a strong set of skills from both inside and outside the government to this critical position for Chief Counsel and the IRS,” said Mike Desmond, IRS Chief Counsel. “We look forward to her coming on board and are fortunate to have her join our staff.”

EEE provides published guidance, field support and taxpayer advice on a wide array of topic areas including qualified retirement plans, health and welfare and other employee benefits, executive compensation and fringe benefits, tax-exempt entities, employment tax, state and local governments and Indian tribal governments.

Previously, Levy was an attorney-advisor and then associate benefits tax counsel with the Office of Tax Policy, U.S. Department of the Treasury, from March 2012 to February 2015. In this capacity, she developed policies and guidance related to the taxation of employee benefits, employment taxes and exempt organizations and coordinated with IRS, Department of Labor, U.S. Department of Health and Human Services and the Domestic Policy Counsel on all aspects of health care reform implementation.

She also was a legislation counsel for the Joint Committee on Taxation from August 2008 to March 2012. She assisted in the development and drafting of the Affordable Care Act; the Health Care and Education Reconciliation Act of 2010; the American Workers, State and Business Relief Act of 2010; the American Jobs and Closing Tax Loopholes Act of 2010; the American Recovery and Reinvestment Act of 2009; the Emergency Economic Stabilization Act of 2008 and the Worker, Retiree and Employer Recovery Act of 2008.

In addition to her government service, Levy has extensive private-sector experience.

In addition to serving as principal at Groom Law Group in Washington, D.C., she also was an associate with Covington & Burling LLP and with Sonnenschein Nath & Rosenthal LLP.

Levy received her B.A. in literature from Yeshiva University and her J.D. from the University of Chicago Law School where she was a member of the Law Review.

Notice 2020-69 announces that the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) intend to issue regulations addressing the application of §§ 951 and 951A of the Internal Revenue Code (Code) to certain S corporations with accumulated earnings and profits.  For those S corporations electing this treatment, global intangible low-taxed income (GILTI) inclusions would create AAA. This notice also announces that the Treasury Department and the IRS intend to issue regulations addressing the treatment of qualified improvement property (QIP) under the alternative depreciation system (ADS) of § 168(g) for purposes of calculating qualified business asset investment (QBAI) for purposes of the foreign-derived intangible income (FDII) and GILTI provisions. These rules when issued would implement recent clarifications enacted as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  All of these provisions were originally part of the 2017 Tax Cuts and Jobs Act (TCJA).

Notice 2020-69 will be published in Internal Revenue Bulletin 2020-39 on Sept. 21, 2020.